Union Pacific reported a fourth-quarter profit on Thursday that rose 7% on the back of higher grain and fertilizer shipments and core pricing gains, sending the railroad operator's shares up more than 4% before the bell.

Union Pacific’s profits rose in the fourth quarter as volume increased 5% and operating costs fell. “Our strong fourth quarter results represent a great capstone to a very successful year for Union Pacific,

Union Pacific on Thursday posted a better-than-expected profit for the fourth quarter helped by improving volumes and robust pricing, which was partially offset by lower fuel surcharge and less profitable cargo mix.

Benchmark analyst Nathan Martin increased the price target for Union Pacific (NYSE:UNP) shares to $275 from the previous $266, while reiterating a Buy rating on the stock. The adjustment follows Union Pacific's fourth-quarter earnings per share (EPS) report of $2.